Eskom

Eskom is an electricity utility that is publicly owned by the South African government. On its website Eskom states that it "generates, transports and distributes approximately 95% of South Africa’s electricity - making up 60% of the total electricity consumed on the African continent." Eskom also states that it is the world's eleventh-largest power utility in terms of generating capacity.

Eskom currently has 13 coal-fired power stations which have an installed capacity of 37 698 megawatts (MW). Three of these power stations -- Camden Power Station, Komati Power Station and Grootvlei Power Station with a combined installed capacity of 3,780 MW -- were mothballed in 1990. The Camden power station was recommissioned in 2008 along with two 125MW units at Komati and another two 200MW units at Grootvlei coming online. Eskom also operates the Koeberg nuclear power station, which has a net output of 1,800 MW. In addition, Eskom has two conventional hydroelectric power stations and two hydro pumped storage schemes with a total installed capacity of capacity of 2,000 MW, all of which are used for peaking capacity.

Eskom also has four gas turbine power stations which have an installed capacity of 1,378 MW. Two of these are old open cycle gas turbine stations (OCGT’s) which run on kerosene but which are only used at times of extreme need due to their high operating costs. Two newer diesel-fuelled power stations, which were commissioned in March 2007, are used to meet peak loads.

South African government electricity plan and Eskom's 'new build' program
After years of substantial overcapacity, the recent rapid growth of the South African economy and generation constraints led the South African government to propose a massive expansion of the electricity generation system. However, instead of relying solely on the publicly owned electricity utility, Eskom, to undertake the expansion, the government directed that 30% of the new capacity be provided by independent power producers. In 2004 the South African Cabinet approved a total five-year expansion plan costing R93 billion with Eskom funding R84 billion of that. Subsequently, Eskom increased its projected electricity demand forecast from 2.3% per annum to 4% and is now planning to spend R150 billion in the five-year period to 2011-2012 in order to cater for the government's target gross domestic product growth rate of 6%. "Under the revised plan, we will deliver an additional 22 000 megawatts (MW) by 2017," states Eskom.

In 2005 Eskom embarked on a massive "new build" plan which has already resulted in just over 4,500 of new capacity with plans to build a further 16,304MW by 2017. Eskom also claims that by 2026 it will "double its capacity to 80 000MW". The projected costs are staggering. Eskom currently estimates that it will spend 385 billion rand [approximately $US51 billion] "up to 2013" and a total of "more than a trillion rand [$USD397 billion] by 2026."

In the wake of widespread blackouts, described by the Department of Minerals and Energy as "load shedding", the South African government re-iterated in January 2008 the need for urgent measures to increase the ability of the electricity system to cater for peak demand and allow sufficient time for necessary maintenance. Setting a target of having 15% reserve peak capacity, the government cautioned that in the absence of major changes that "the risk of risk of load shedding will remain high until at least 2013."

The government also noted that "the price of electricity in South Africa is very low compared to other countries around the world. Many countries have also embarked upon large build programmes and the gap between South Africa and the rest of the world is widening.". In particular it noted that the "‘Gap’ to next cheapest [country] increased to 74% in 2007 from 30% in 2006", that "current pricing is half of the replacement value of power plant" and that "increases above inflation will be needed to fund capacity expansion." To help fund the cost of the massive construction programme, Eskom has been granted permission to increase its electricity tariff by 27.5 percent in the 2008/09 financial year.

Eskom's commissioning of new capacity, as of April 2009, is scheduled to be:

World Bank Approves $3.75B loan for Eskom Plant
On April 8, 2010 the World Bank voted to approve a $3.75 billion loan for South African utility Eskom to build a 4800 mw coal-fired power plant. The United States abstained from voting on the measure. It was the first World Bank loan to the country since the fall of Apartheid in the mid-1990s. Critics, however, were not pleased with the World Bank's decision to fund the coal plant, even though the loan had provisions for other energy technologies like wind and solar. Other countries that abstained from the vote included the U.K., Netherlands and Italy.

Environmentalists Oppose World Bank Loan to Eskom
In late February 2010, climate change activists and concerned individuals from about the globe voiced their objection to the $3 billion loan that would fund two new coal-fired power plants in South Africa that would be operated by Eskom. The groups, which includes Climate Justice Now, groundWork and the Federation for a Sustainable Environment, vowed to pressure country directors within the World Bank to vote against the loan in March 2010 and also said they would revive the World Bank "bond boycott" that was launched last decade to end structural adjustment programs and anti-environmental project funded by the Bank.

In order to power the new coal plants, over 40 new mines would have to be opened up in the region. The proposed plants would also increase utility rates to consumers. Large environmental groups such as the Sierra Club have signed on to a petition that opposes the loan.

Report finds World Bank did not consider externalities of Eskom Plant
A March 2011 report by the Center for International Environmental Law (CIEL), “Fossilized Thinking: The World Bank, Eskom, and the Real Cost of Coal” examined the economics underlying the World Bank’s $3 billion loan for the Eskom plant, evaluating whether the Bank adequately considered the project's impacts on human health and the environment and the likely economic costs of these impacts. The Bank’s operational policies require that such externalities be taken into account to determine whether a project’s long-term economic benefits outweigh its costs.

CIEL’s analysis concluded that the Bank failed to adequately address and quantify important negative environmental effects, such as water scarcity and quality, air quality, and transboundary impacts. Nor did the Bank fully address the public health impacts associated with the environmental consequences of coal-based power. Steve Porter, Climate Program Director at CIEL, said: “This project highlights a broader problem in World Bank funding. Because all of the costs have not been accounted for, coal projects like Eskom have been unfairly favored, which means that there has never been a real consideration of alternatives, such as wind, solar and other alternative energy sources.”

The report was released as the World Bank conducts an Energy Strategy Review process, as well as a review of the Eskom project by the Bank’s Inspection Panel. CIEL’s report calls on The World Bank to consider the social and environmental impacts of Eskom, but the Inspection Panel is unlikely to issue its report before the conclusion of the Energy Strategy Review.

Ex-Im Bank approves $805 million loan for Kusile Plant
On April, 14, 2011 Black & Veatch Corp. won preliminary approval for $805.6 million in financing from the U.S. Export-Import Bank for a coal-fired power plant in South Africa. The Kusile Power Station, being developed by Eskom Holdings Ltd for South Africa's Mpumalanga Province, will include six units and have a total capacity of 4,800 megawatts.

On May 31, 2011, Eskom announced that the Export-Import Bank of the United States (Ex-Im Bank) had given its initial approval for an $805 million (R5.78 billion) loan to help Eskom continue to build the Kusile Power Station in the Mpumalanga Province. The final vote on the Ex-Im Bank’s loan for Kusile is expected in approximately 35 days after a mandatory Congressional notification period.

The South African government has indicated that it is not in a position to contribute any further funds to its Kusile and Medupi Power Station projects. In the case of Medupi, additional financing is coming from the World Bank.

The plant is expected to emit an estimated 36.8 million tonnes of CO2-equivalent per year once it is completed, the 4800 megawatt Kusile coal power plant is forecast to increase South Africa’s greenhouse gas emissions – already the biggest in Africa – by nearly 10%. In addition, it’s projected to consume more than a billion gallons of water annually and release various health-threatening pollutants into the air. South Africa has extensive coal reserves and is generating more than 90% of its electricity supply through it.

Existing Eskom Power Stations
Eskom's current power stations are:

Coal-fired stations

 * Arnot Power Station: 2,140 MW installed capacity comprising 4 X 350 MW units and 2 X 370MW units. The power station is located at Middelburg, Mpumalanga;
 * Duvha Power Station: 3,600 MW installed capacity comprising 6 X 600 MW units.The power station is located at Witbank, Mpumalanga
 * Hendrina Power Station: 2,000 MW installed capacity comprising 10 X 200 MW units. The power station is located at Hendrina, Mpumalanga.
 * Kendal Power Station: 4,116 MW installed capacity comprising 6 X 686 MW units. The power station is located at Witbank, Mpumalanga
 * Kriel Power Station: 3,000 MW installed capacity comprising 6 X 500 MW units. The power station is located at Kriel, Mpumalanga
 * Lethabo Power Station: 3,708 MW installed capacity comprising 6 X 618 MW units. The power station is located at Sasolburg, Free State
 * Majuba Power Station: 4,110 MW installed capacity comprising 3 X 657 MW units and 3 X 713 MW units. The power station is located at Volksrust, Mpumalanga.
 * Matimba Power Station: 3,990 MW installed capacity comprising 6 X 665 MW units. The power station is located at Ellisras, Northern Province
 * Matla Power Station: 3,600 MW installed capacity comprising 6 X 600 MW units. The power station is located at Kriel, Mpumalanga.
 * Tutuka Power Station: 3,654 MW installed capacity comprising 6 X 609 MW units. The power station is located at Standerton, Mpumalanga.
 * Camden Power Station: 1,580 MW installed capacity comprising 6 X 200 MW units and 2 X 190 MW units. The power station is located at Ermelo, Mpumalanga.

Currently Mothballed coal-fired stations
The following coal-fired power stations were mothballed in 1990 and are currently in the process of being recommissioned, which started in 2005.
 * Grootvlei Power Station: 1 200 MW installed capacity comprising 6 X 200 MW units. The power station is located at Balfour, Mpumalanga.
 * Komati Power Station: 1 000 MW installed capacity comprising 5 X 100 MW units and 4 X 125 MW units. The power station is located at Middelburg, Mpumalanga.

Proposed new coal-fired power stations

 * Arnot Power station upgrade
 * Kusile Power Station, a 4,800 MW power station which is currently under construction.
 * Medupi Power Station, a 3,152MW power station which is currently under construction.
 * Underground coal gasification plant, a proposed 2,100MW power station making use of underground coal gasification technology. Eskom said it may start designing the project at the end of 2011, and the first electricity could be delivered by March 2020, with the full station completed by September 2022. Eskom’s budget for the project is around R1.5 billion up to 2013.

Nuclear station

 * Koeberg: 1,930 MW installed capacity comprising 2 X 920 MW) units. The power station is located at Melkbosstrand, Western Cape.

Conventional hydro stations – Orange River

 * Gariep: 360 MW installed capacity comprising 4 X 90 MW units. The power station is located at Norvalspont, Free State.
 * Vanderkloof: 240 MW installed capacity comprising 2 X 120 MW units. The power station is located at Petrusville, Northern Cape.

Pumped storage schemes

 * Drakensberg: 1000 MW installed capacity comprising 4 X 250 MW turbines. The power station is located at Bergville, KwaZulu Natal.
 * Palmiet: 400 MW installed capacity comprising 2X 200 MW turbines. The power station is located at Grabouw, Western Cape.

Gas fired stations

 * Acacia: 171 MW installed capacity comprising 3 X 57 MW units. The power station is located at Cape Town, Western Cape.
 * Port Rex: 171 MW installed capacity comprising 3 X 57 MW units. The power station is located at East London, Eastern Cape.
 * Ankerlig 592 MW installed capacity comprising 4 x 148 MW units. The power station is located at Atlantis, Western Cape.
 * Gourikwa 444 MW installed capacity comprising 3 x 148 MW units. The power station is located at Mossel Bay, Western Cape.

Workers stop construction of coal plants
On May 10, 2011, Eskom said workers’ protests had shut down construction of two coal-fired power plants. Work on Medupi stopped that day after protesting workers damaged some vehicles, while the other plant, Kusile, had been shut down since protests erupted on May 6. Eskom spokeswoman Hilary Joffe said the protest was apparently over foreigners being brought in for specialized welding tasks. Medupi is scheduled start operating at the end of 2012, and Kusile at end of 2014.

Greenpeace dumps coal at Eskom
On June 27, 2011, Greenpeace protesters blocked one of the entrances of the Eskom headquarters with five tons of coal, to publicly demand that Eskom stop the construction of the Kusile Power Station and shift to renewables. The activists held banners calling on Eskom to clean up its act and stop coal.

The Kusile coal-fired power plant will be one of the biggest coal-fired power stations in the world, with 4,800 MW of power production, using 17 million tons of coal per year. According to Greenpeace, their action highlighted the true cost of Eskom’s addiction to coal: environmental destruction at every step, the pollution of scarce water supplies, and the destruction of people’s health and wellbeing.

Greenpeace Africa’s climate and energy campaigner Melita Steele said: “To date, Eskom’s investments in renewable energy are limited to tiny projects of 100MW of wind and 100MW of solar. This illustrates Eskom’s lack of commitment to a sustainable future for South Africa.”

Greenpeace Africa’s 2011 report, "The Advanced Energy (R)evolution", says that South Africa - as the largest CO2 emitter on the continent, and the 12th largest in the world - has a moral responsibility to address climate change, and that switching to 50% renewables by 2030 would create 150,000 direct jobs.

According to Steele, “Greenpeace has tried repeatedly to engage with Eskom about its addiction to coal and nuclear energy. Eskom has however not shown any intention of changing its tune. Today Greenpeace publicly calls on Eskom to clean up its act."

Personnel

 * Chose Choeu, Managing Director of Corporate Affairs

Contact Details
Eskom PO Box 1091 Johannesburg 2001 South Africa Phone: +27 11 800 8111 Website: http://www.eskom.co.za/live/index.php

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